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Mann still at the hawkish end of the spectrum

BOE
  • Mann's speech has a lot of interesting points about how different models are anticipating inflation, the lessons that can be learned from looking at previous forecasts and what "restrictive" means.
  • The crux of it is that she still favours more tightening, and still seems at the hawkish end of the MPC.
  • She has said previously that if she is wrong she will vote for cuts - that isn't new. And she's long held the view it's better to overtighten and reverse quickly rather than hold rates higher for longer.
  • So it seems certain she will vote for another hike in September and based on this speech votes for hikes at future meetings are likely (markets only price around a cumulative 41bp at present).
  • This speech takes a different view to recent comments from Bailey and Pill.

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